Sonoma County auditors to target employee credit card use

February 2, 2013, 12:22AM

02/02/2013

The Sonoma County Board of Supervisors next week is set to authorize an internal audit and tighter oversight of employee credit card use, a move prompted in part by recent public records requests by The Press Democrat.

The plan includes a call for improved "internal controls" on who gets county-issued credit cards and how they are used.

It also spells out existing and new checks to detect when the use is improper, and when they are detected, steps to make sure taxpayers are reimbursed.

The plan comes before the Board of Supervisors on Tuesday, five days after county officials responded to a Press Democrat public information request by turning over records for 344 cardholders and 20,000 county credit card transactions in the past two years.

They show a total of nearly $4.4 million on charges for services and supplies, travel, lodging, meals and other goods, all ostensibly for the purpose of county business.

The spending, which in 2011 and 2012 represented 0.3 percent of the county's annual $1.2 billion budget, nevertheless has come under scrutiny amid heightened tension over cuts to county services. Divisions over pay and benefits between rank-and-file employees — few of whom have county cards — and elected officials and managers have also fueled interest in the credit receipts.

The bills range from $2,500 for government retreats, public meetings and mapping software to office supply and parking purchases of less than a dollar.

Spending among individuals topped out at $182,700, the amount charged by a county Water Agency engineer responsible for information technology purchases for his office.

County department heads and managers in Human Services, the pension system, the Water Agency and the airport occupied other slots among the top 30 spenders, all of whom spent at least<NO1><NO> $35,000. Many of the top 10 held jobs that involved purchasing responsibilities.

County supervisors, who often take the most heat for their out-of-county junkets, were further down the list. Three members at the time — Valerie Brown, Shirlee Zane and Efren Carrillo — exceeded the $12,000 average for all cardholders. Supervisors David Rabbitt and Mike McGuire came in closer to the median of $5,300.

Sixty percent of the total spending was for services and supplies, 12 percent for lodging, 11 percent for professional memberships and conference dues, 7 percent for airfare, and 4 percent for food. The remaining 6 percent came from charges for fuel, car and equipment rental, parking and transportation and other services.

County officials say the credit program, in place since 2000 and open mostly to managers, elected officials and some field workers, saves more than $250,000 annually in reduced paperwork and processing for smaller transactions.

In compiling the records, county administrative officials said they found only "a couple" cases where employees had used their county cards for personal purchases. They said the charges were later reimbursed. An exact number of individuals involved or the amount or type of their purchases was unavailable Friday and could not be identified by The Press Democrat in its initial analysis.

In other cases, employees used the cards for services and supplies that are supposed to be bought through standard purchase orders, such as computer equipment, administrative officials said.

They said the plan going before supervisors would seek to clarify those policies and expand training for employees to make sure rules are followed.

But county administrators balked at a suggestion that the audit proposal signaled some larger problems exist.

"That's just good government. You should always make sure you're crossing the T's and dotting the I's," said Jim Leddy, a county spokesman. He said that the review would be "rigorous."

"We have strong controls in place and this next process is going to strengthen them if necessary down to that detailed level," Leddy said.

Supervisor Shirlee Zane, who was second behind Brown in spending by board members, said she looked at the county report and saw a need for tighter controls.

Currently, 304 employees are signed up for the Visa accounts, which are issued through the statewide Cal Card program. The cards are handed out at the discretion of department heads and Zane said that process needs stronger oversight.

"There's no real policy in terms of who the department heads give the cards to," Zane said. "We need to tighten it up."

Zane used her county card for $14,400 in travel, lodging and meals over the period.

She, like other top officials interviewed Friday, defended her charges. She said she pays out of pocket for most meals and ground transportation on lobbying trips and government gatherings in Washington D.C. She and other supervisors insist the trips are needed to bring home funding and advance county interests.

"Whenever you have someone that steps up and takes a national leadership role, there are going to be expenses," Zane said.

Brown, who retired at the end of 2012, said more than half of her $16,330 charges for the period were reimbursed by the California State Association of Counties to cover her role as a board member in a similar national body.

County officials confirmed the reimbursements, which are not reflected in the latest batch of records disclosed to The Press Democrat this week.

Brown's international trips, which drew criticism in her final two years in office, were not paid for by the county, she said.

"I was not a big card user in my 10 years (in office)," she said.

The number of cardholders has been consistent in recent years at about 300. Annual spending has ranged from a recent low of $1.1 million in the fiscal year 2007-2008 to a high of about $2.1 million in 2011-2012.

County administrative officials said they did not have Cal Card information on how Sonoma County compares to other counties.

The most prolific use of cards occurs at the county Water Agency, which accounted for $1.9 million of the two-year spending total. It had 23 of the top 30 card users by total expenditures and the most overall cardholders in the records, at 53.

Brad Sherwood, an agency spokesman, said the credit cards streamline purchases for employees who need quick access to supplies for capital projects and services for other agency duties.

He noted that the charges accumulated by agency employees in two years amounted to 0.5 percent of the agency's annual budget of $214 million.

"We have a lot of moving parts around here," Sherwood said. "We've found (the cards) useful."

County employees who don't have government-issued credit cards file paper claims to be reimbursed for job-related purchases. Cardholders can do the same on purchases when they don't use their cards. Reimbursements typically amount to far less than credit spending, officials said.

The Press Democrat also has received two years of those reimbursement claims, stretching from late 2010 to late 2012.

Tuesday's Board of Supervisors discussion on Cal Cards is set for the consent agenda, where deliberation is typically limited and staff presentation minimal.

Chairman David Rabbitt suggested the item could be pulled onto the regular agenda if supervisors or public feedback suggest it should be.

Rabbitt said he welcomed the focus on Cal Card accounts, but said the county should be careful in its overhaul not to micromanage the credit program.

The Sonoma County Board of Supervisors next week is set to authorize an internal audit and tighter oversight of employee credit card use, a move prompted in part by recent public records requests by The Press Democrat.

The plan includes a call for improved "internal controls" on who gets county-issued credit cards and how they are used.

It also spells out existing and new checks to detect when the use is improper, and when they are detected, steps to make sure taxpayers are reimbursed.

The plan comes before the Board of Supervisors on Tuesday, five days after county officials responded to a Press Democrat public information request by turning over records for 344 cardholders and 20,000 county credit card transactions in the past two years.

They show a total of nearly $4.4 million on charges for services and supplies, travel, lodging, meals and other goods, all ostensibly for the purpose of county business.

The spending, which in 2011 and 2012 represented 0.3 percent of the county's annual $1.2 billion budget, nevertheless has come under scrutiny amid heightened tension over cuts to county services. Divisions over pay and benefits between rank-and-file employees — few of whom have county cards — and elected officials and managers have also fueled interest in the credit receipts.

The bills range from $2,500 for government retreats, public meetings and mapping software to office supply and parking purchases of less than a dollar.

Spending among individuals topped out at $182,700, the amount charged by a county Water Agency engineer responsible for information technology purchases for his office.

County department heads and managers in Human Services, the pension system, the Water Agency and the airport occupied other slots among the top 30 spenders, all of whom spent at least<NO1><NO> $35,000. Many of the top 10 held jobs that involved purchasing responsibilities.

County supervisors, who often take the most heat for their out-of-county junkets, were further down the list. Three members at the time — Valerie Brown, Shirlee Zane and Efren Carrillo — exceeded the $12,000 average for all cardholders. Supervisors David Rabbitt and Mike McGuire came in closer to the median of $5,300.

Sixty percent of the total spending was for services and supplies, 12 percent for lodging, 11 percent for professional memberships and conference dues, 7 percent for airfare, and 4 percent for food. The remaining 6 percent came from charges for fuel, car and equipment rental, parking and transportation and other services.

County officials say the credit program, in place since 2000 and open mostly to managers, elected officials and some field workers, saves more than $250,000 annually in reduced paperwork and processing for smaller transactions.

In compiling the records, county administrative officials said they found only "a couple" cases where employees had used their county cards for personal purchases. They said the charges were later reimbursed. An exact number of individuals involved or the amount or type of their purchases was unavailable Friday and could not be identified by The Press Democrat in its initial analysis.

In other cases, employees used the cards for services and supplies that are supposed to be bought through standard purchase orders, such as computer equipment, administrative officials said.

They said the plan going before supervisors would seek to clarify those policies and expand training for employees to make sure rules are followed.

But county administrators balked at a suggestion that the audit proposal signaled some larger problems exist.

"That's just good government. You should always make sure you're crossing the T's and dotting the I's," said Jim Leddy, a county spokesman. He said that the review would be "rigorous."

"We have strong controls in place and this next process is going to strengthen them if necessary down to that detailed level," Leddy said.

Supervisor Shirlee Zane, who was second behind Brown in spending by board members, said she looked at the county report and saw a need for tighter controls.

Currently, 304 employees are signed up for the Visa accounts, which are issued through the statewide Cal Card program. The cards are handed out at the discretion of department heads and Zane said that process needs stronger oversight.

"There's no real policy in terms of who the department heads give the cards to," Zane said. "We need to tighten it up."

Zane used her county card for $14,400 in travel, lodging and meals over the period.

She, like other top officials interviewed Friday, defended her charges. She said she pays out of pocket for most meals and ground transportation on lobbying trips and government gatherings in Washington D.C. She and other supervisors insist the trips are needed to bring home funding and advance county interests.

"Whenever you have someone that steps up and takes a national leadership role, there are going to be expenses," Zane said.

Brown, who retired at the end of 2012, said more than half of her $16,330 charges for the period were reimbursed by the California State Association of Counties to cover her role as a board member in a similar national body.

County officials confirmed the reimbursements, which are not reflected in the latest batch of records disclosed to The Press Democrat this week.

Brown's international trips, which drew criticism in her final two years in office, were not paid for by the county, she said.

"I was not a big card user in my 10 years (in office)," she said.

The number of cardholders has been consistent in recent years at about 300. Annual spending has ranged from a recent low of $1.1 million in the fiscal year 2007-2008 to a high of about $2.1 million in 2011-2012.

County administrative officials said they did not have Cal Card information on how Sonoma County compares to other counties.

The most prolific use of cards occurs at the county Water Agency, which accounted for $1.9 million of the two-year spending total. It had 23 of the top 30 card users by total expenditures and the most overall cardholders in the records, at 53.

Brad Sherwood, an agency spokesman, said the credit cards streamline purchases for employees who need quick access to supplies for capital projects and services for other agency duties.

He noted that the charges accumulated by agency employees in two years amounted to 0.5 percent of the agency's annual budget of $214 million.

"We have a lot of moving parts around here," Sherwood said. "We've found (the cards) useful."

County employees who don't have government-issued credit cards file paper claims to be reimbursed for job-related purchases. Cardholders can do the same on purchases when they don't use their cards. Reimbursements typically amount to far less than credit spending, officials said.

The Press Democrat also has received two years of those reimbursement claims, stretching from late 2010 to late 2012.

Tuesday's Board of Supervisors discussion on Cal Cards is set for the consent agenda, where deliberation is typically limited and staff presentation minimal.

Chairman David Rabbitt suggested the item could be pulled onto the regular agenda if supervisors or public feedback suggest it should be.

Rabbitt said he welcomed the focus on Cal Card accounts, but said the county should be careful in its overhaul not to micromanage the credit program.

"I'm all for that discussion," he said. "It's good to be airing some dirty laundry."